Luis Alejo bill exempts thousands from pension changes

SACRAMENTO -- Thousands of state transit workers are arguing they aren't subject to California's ballyhooed pension changes passed into law last year, triggering questions about the state Legislature's commitment to pension reform and potentially placing $1.1 billion in federal grants at risk.

The issue erupted among Monterey-Salinas Transit workers late last year and has since been replicated across the state. It began when the Amalgamated Transit Union protested Gov. Jerry Brown's pension bill to U.S. Department of Labor officials, arguing their benefits are protected by strict federal labor rules.

"The state can't regulate those plans," said Barry Broad, a Sacramento lobbyist representing the Amalgamated Transit Union and other transit unions. "Transit worker plans are distinct and don't have the funding problems that led to (state pension cuts)."

Since Federal Transit Agency grants must comply with federal labor law, the union warned the state pension cuts could cost California more than $1 billion in transit funds. The move also imperiled $3 million for MST, forcing the agency to weigh steep and abrupt cuts.

"We were prepared, at that time, to implement a 30 percent reduction in service. Three-zero," said MST General Manager Carl Sedoryk. "For our employees to risk layoffs and for our customers to risk reductions in service because we're complying with a state law just doesn't seem right."

UNION ARGUMENT

The unions argue that the pension reforms are a violation of decades-old federal protections of transit worker collective bargaining rights, originally aimed at protecting private-sector workers whose transit agencies moved to public ownership.

When the Department of Labor agreed with the union, that stuck Sedoryk and other transit agency managers with a series of bad choices -- ignore the state's new pension rules, violate federal labor laws or shrink their budget by millions.

The cuts were avoided when MST convinced the feds to release the $3 million since the pension bill didn't go into effect until the first of the year. But future grants are still in doubt, and the agency has held a series of public meetings about possible cuts.

"If (the pension bill) isn't modified, I don't see how we'll have any choice but to live without federal funds," Sedoryk said, making clear he disagrees with the Department of Labor's conclusion.

Though partly funded through a local sales tax, Santa Cruz Metro also relies on millions in federal funds. General Manager Les White said he is watching the issue closely.

"It's a legitimate concern. We would like to see a revisiting of the issue," White said.

PENSION SOLUTION

Assemblymember Luis Alejo, D-Watsonville, is offering one way out, proposing to exempt about 20,000 of transit workers statewide from the bill, the Public Employees Pension Reform Act. It is one of several pieces of pension "clean-up" bills floating around the Capitol.

Alejo said the bill preserves $1.1 billion in federal grants to transit agencies across the state.

"The state of California can't afford to lose this funding. Losing this money means a widespread loss of jobs and revenues, especially to those students, workers and seniors who rely upon public transit to get to work, school and to the doctor," Alejo said in a statement provided by his office.

Those workers represent a tiny fraction of the millions affected by the pension reforms, but the bill has nevertheless led to accusation the state is backtracking on pension changes -- changed that have already been criticized in some corners as insufficient. Several prominent newspapers have weighed in against the bill.

Broad said the issue is being overblown. The transit workers covered by the bill are a distinct subset of employees whose collectively-bargained pension plans are separate from most public employees.

"This is not these crazy public employee retirement situations. It's just not there," Broad said.

Broad vehemently disputed the notion that transit workers were leveraging a federal loophole to get out from under a state law. He said workers are protective of their rights to collectively bargain benefits, without having them imposed by the state.

"To these unions, these particular unions, the (bargaining) rights are to them what the minimum wage is to the other unions. It's their foundational right," Broad said.